The best way to manage debt while unemployed

When you're unemployed, it can be harder than ever to manage your debt. But with the right strategy, you can stop worrying about debt and start focusing on finding a new job. Here's how to get a handle on your debt during unemployment:

Assess Your Assets

First consider all assets and possible sources of income available to you. Can you accept part-time work, sell belongings on eBay, or take a local babysitting gig to make a little extra cash for the necessities? This can make it easier to stay afloat and make your minimum monthly payments on-time. And if you haven't already done so, visit the U.S. Department of Labor to apply for unemployment benefits.

Create a Survival Budget

Determine what your basic living expenses are, such as food, mortgage, utilities, transportation, insurance, and medical costs. Create a budget that details every single dime you spend each month so that you can determine what can be cut during this time. Once you find new employment, try to stick to this survival budget so that you have extra funds available to pay down debt or invest in an emergency savings fund.

Assess your remaining costs to determine if there is anything that can be cut. For instance, try reducing your credit card and cable bills, forego the land line, cancel any magazine subscriptions, cut back on entertainment expenses and streaming services, and reduce or eliminate costly habits (such as drinking, smoking, and eating out). Look for other creative ways to save money, such as relying on public transportation and finding easy ways to cut back on utilities. (See also: 10 Ways to Save Money When You Are Unemployed)

Set Priorities

Prioritize your debts. Determine which bills need to be paid first, once your basic living expenses are taken care of. Secured credit accounts, like credit cards, loans, and car payments should be paid next.

The goal is to preserve your savings, so don't try paying off any debts early at this point. Make only the minimum payments on your credit cards and avoid using any sort of credit for as long as possible. Once you find new employment, you can start working on paying down your debts as quickly and efficiently as possible.

If you have a federally-backed student loan, there are a number of payment options available during tough times. Often, the loans can be deferred until you find work again. Check with the U.S. Department of Education for more information.

Negotiate With Creditors

Speak with your mortgage lender and credit card issuers at the first sign of trouble. If you wait to contact them until after you've already missed a payment, it's less likely creditors will work with you to find a reasonable solution.

Your creditors may be able to help you ease loan terms, reduce your monthly payments, or even put your payments on hold for a short period of time. While there are no guarantees that they will work out an arrangement with you, it's worth a shot.

Do you have other tips for dealing with debt when you're unemployed? Please share your thoughts in the comments!

Related: The worst cities for saving money

15PHOTOS

The Worst Cities for Saving Money

See Gallery

The best way to manage debt while unemployed

15. Sacramento, Calif.

Population: 485,199

Median income: $50,013

Unemployment rate: 5.5%

Median home listing price: $530,000

Median monthly rent: $1,395

Average gas price: $2.223

Average cost of groceries: $42.94

Sales tax: 8.5%

The capital of California is more affordable than most of the states' major cities. But that doesn’t make it an ideal place for savers. Home prices still are high, and the median income in Sacramento is lower than the national median income of $53,482, leaving residents without a lot of wiggle room in their budgets to set aside money in savings.

Photo credit: Andrew Zarivny/Shutterstock.com

14. Bakersfield, Calif.

Population: 368,759

Median income: $56,842

Unemployment rate: 10.2%

Median home listing price: $245,000

Median monthly rent: $1,395

Average gas price: $2.35

Average cost of groceries: $35.68

Sales tax: 7.5%

The unemployment rate in Bakersfield is the second highest among the worst cities for savers. However, the median income of those who are employed is higher than many of the other cities on this list. Housing costs also are more affordable, which is why Bakersfield ranks lower than most of the other California cities that are the worst places for savers.

Photo credit: Gary C. Tognoni/Shutterstock.com

13. San Jose, Calif.

Population: 1,015,785

Median income: $83,787

Unemployment rate: 3.8%

Median home listing price: $725,000

Median monthly rent: $3,300

Average gas price: $2.38

Average cost of groceries: $40.95

Sales tax: 8.75%

The median home listing price in San Jose is the second highest among the worst cities to save. It’s also one of America’s most expensive rental markets, according to CNN. But a high median income — as a result of its booming tech industry — helps offset the high housing costs somewhat and doesn’t make it quite as hard to save as other places on this list.

Photo credit: Mariusz S. Jurgielewicz/Shutterstock.com

12. Long Beach, Calif.

Population: 473,577

Median income: $52,944

Unemployment rate: 5.4%

Median home listing price: $479,950

Median monthly rent: $2,197

Average gas price: $2.567

Average cost of groceries: $36.58

Sales tax: 9%

This city on the Pacific Coast is a slightly better city for savers than neighboring Los Angeles. But the median income in Long Beach isn’t high enough to offset high housing costs, leaving residents with little left over to save.

Photo credit: Jon Bilous/Shutterstock.com

11. Stockton, Calif.

Population: 302,389

Median income: $45,347

Unemployment rate: 8.8%

Median home listing price: $ 239,450

Median monthly rent: $1,300

Average gas price: $2.21

Average cost of groceries: $45.33

Sales tax: 9%

Stockton has two big strikes against it for savers: a median income that’s well below the national median income and a high unemployment rate. The city itself filed for bankruptcy in 2012 because fiscal mismanagement left it unable to pay its workers and fund the pensions of former city employees, according to Reuters. It emerged from bankruptcy in 2015.

Photo credit: Terrance Emerson/Shutterstock.com

10. San Diego

Population: 1,381,069

Median income: $65,753

Unemployment rate: 4.7%

Median home listing price: $589,900

Median monthly rent: $2,850

Average gas price: $2.488

Average cost of groceries: $37.79

Sales tax: 8%

National Geographic Traveler magazine selected San Diego as one of the best destinations in the world. It’s certainly a nice place to visit, but it can be a tough place to live if you’re trying to save money. Although the median income in San Diego tops the national median, high housing costs can make it difficult to have money left over to save.

Photo credit: Dancestrokes/Shutterstock.com

9. Fresno, Calif.

Population: 515,986

Median income: $41,455

Unemployment rate: 10.3%

Median home listing price: $219,900

Median monthly rent: $1,250

Average gas price: $2.314

Average cost of groceries: $33.95

Sales tax: 8.23%

The largest city in California’s Central Valley has the lowest house list price and lowest median rent in GOBankingRates' ranking of worst cities for savers. In fact, housing costs are lower here than half of the best cities for savers. The unemployment rate, however, is the highest of all cities on this list. The lower housing costs aren't enough to offset other expenses, so it's still hard to save money in this city.

Photo credit: Tupungato/Shutterstock.com

8. Miami

8. Miami

Population: 430,332

Median income: $30,858

Unemployment rate: 5%

Median home listing price: $459,000

Median monthly rent: $2,500

Average gas price: $1.874

Average cost of groceries: $39.06

Sales tax: 7%

Miami has the lowest median income on this list of worst cities for saving money, which means it’s harder for the city’s residents to afford the high cost of living there. On the plus side, though, Florida has no state income tax. And the 7 percent sales tax rate in Miami is the lowest among the worst cities for savers.

Photo credit: PHOTOSVIT/Shutterstock.com

7. Santa Ana, Calif.

Population: 334,909

Median income: $52,519

Unemployment rate: 5.4%

Median home listing price: $430,000

Median monthly rent: $2,598

Average gas price: $2.545

Average cost of groceries: $40.42

Sales tax: 8%

Forbes named Santa Ana one of the coolest cities in America in 2014 based on a ranking of entertainment and recreational amenities, diverse population and foodie culture. But that cool factor comes with a high cost. The median home list price and monthly rent — as well as average grocery and gas costs — are high, and the median income in Santa Ana is slightly below the national median, all of which can make it a tough place to save money.

Photo credit: iStock.com/Davel5957

6. New York, N.Y.

Population: 8,491,079

Median income: $52,737

Unemployment rate: 4.4%

Median home listing price: $699,000

Median monthly rent: $2,700

Average gas price: $1.984

Average cost of groceries: $46.17

Sales tax: 8.88%

Frank Sinatra was right when he sang the following line about living in New York: “If I can make it here, I can make it anywhere.” If you can manage to save money while living in this city with its exorbitantly high cost of living, then, yes, you can probably find a way to save in most other cities. Not only is it hard to save in New York because housing costs and daily expenses are high, but the median income is below the national median.

Photo credit: Atanas Bezov/Shutterstock.com

5. Anaheim, Calif.

Population: 346,997

Median income: $59,707

Unemployment rate: 5.4%

Median home listing price: $535,000

Median monthly rent: $2,500

Average gas price: $2.545

Average cost of groceries: $47.72

Sales tax: 8%

Anaheim is home to Disneyland Resort, which is great for visiting, but the city might not be the best place to call home if you want to save money. This city near Los Angeles rivals its bigger neighbor when it comes to a high cost of living. But a higher median income and lower housing costs keep Anaheim from being ranked as high as LA on this list of worst places to live if you’re trying to save money.

Photo credit: Juan Camilo Bernal/Shutterstock.com

4. Irvine, Calif.

Population: 248,531

Median income: $91,999

Unemployment rate: 5.4%

Median home listing price: $847,922

Median monthly rent: $3,400

Average gas price: $2.545

Average cost of groceries: $44.67

Sales tax: 8%

Irvine is an affluent city in Southern California that has the highest median income of the 15 worst places for saving money. The city has been included in several "best places to live" lists in recent years because of its strong economy, well-regarded schools, and, as a planned community, thousands of acres of green space. But high home listing prices, rent, and daily expenses such as gas and groceries can take a big bite out of the big salaries in Irvine, leaving little money to save.

Photo credit: iStock.com/Davel5957

3. Oakland, Calif.

Population: 413,775

Median income: $52,962

Unemployment rate: 3.9%

Median home listing price: $480,000

Median monthly rent: $4,650

Average gas price: $2.373

Average cost of groceries: $53.43

Sales tax: 9.5%

For years, Oakland has been considered the cheaper alternative to San Francisco. However, it’s by no means a cheap place to live relative to other cities in the U.S. In fact, rent prices in Oakland increased more in 2015 than any other major city — including San Francisco — according to the 2015 Zumper National Rent Report. Considering the median income here is lower than the national median, residents have little left over to stash into savings after covering high housing costs and daily expenses.

Photo credit: iStock.com/Davel5957

2. Los Angeles

Population: 3,928,864

Median income: $49,682

Unemployment rate: 5.4%

Median home listing price: $650,000

Median monthly rent: $3,950

Average gas price: $2.567

Average cost of groceries: $39.01

Sales tax: 9%

For the second year in a row, California’s largest city lands in the second spot on GOBankingRates' list of worst places to live for saving money. LA is considered the worst major city for housing affordability, according to a report by Southern California Public Radio. Although places such as San Francisco have higher rents and home listing prices, median income in Los Angeles is lower, making it harder to cover the high cost of living and leaving little room in household budgets to save.

Photo credit: iStock.com/Sean Pavone

1. San Francisco

Population: 852,469

Median income: $78,378

Unemployment rate: 3.9%

Median home listing price: $998,000

Median monthly rent: $4,650

Average gas price: $2.516

Average cost of groceries: $58.76

Sales tax: 8.75%

San Francisco retains its No.1 spot on this list of worst places to live if you’re trying to save money. Known for being one of the most expensive areas in the U.S., the City by the Bay has the highest median home listing price, highest median rent and highest average cost of groceries on this list. With such high housing costs and daily expenses, a median income of $78,378 doesn’t go far in San Francisco.